captioned by the national captioning institute --www.ncicap.org-- >> business news from the capital region. this is s "wasngton busiss report" wi abc7 national corresespondenent rebecca coope. >> welcome and thank you for joining us. there were two big budget battle is taking place in washington this week. the president laid out his budget for 2012, but first, congress is dealing with what they put off last year. businesses say they want the federal budget that offers moree tax cutbut also get serious about reducing the deficit. a growing number of critics say both parties are avoiding a big

issu entitlements. mark warner teamed up with a republican to form a growing bipartisan group that says it is time to take on the big-ticket items. this week, i went to capitol hill to talk to senator warner. >> we are going to need to go further. we need to realize that we cannot have this debate about our deficit and our long-term debt if we just look at the2% of the budget ththat is discretionary spending. we have to look at defense and how we are spending money in terms of tax expendituress which is another way of spending. one of the things i found working with republican senators -- we are saying let's take the president's deficit commission to put us on a path back to sustainability. let's use the work o of that grp as a starting point to do any

long-term, structural re balance and of our balance sheet. we have to do it on the spendin side and the deficitide. we did not get into this problem overnight. >> you are starting to get a lot of attention on the natitional stage. tell us a little b bit about where uc hope and wary you think is going to be the tououghest. >> we expanded our group to include those senator, and there is another 20 or more senators, democrats and republicans, who are saying if we all linked together, there is ough here that i think people wi be willing to do this. the question about deficit reduction is not if we are going to do it. at some poi, the markets are going to force us to do it.

let's do it in a way that does not force us into a sovereign debt crisis. think thee recognition -- i spent 20 years in business. i can read a balance sheet. the balance sheet of this country needs to be structurally fixed. >> are you disappointed in the president's budget? >> the president start -- i think we have went back and forth particularly with house republicans. even with what the president has done in this first year, that does not get us to where we need to be with entitlements, defense, and tax expenditures. i am not surure that everybody realizes we collect $1 trillion a year in income taxes and spend $1.20 trillion a year in tax expenditures. bringing down somome of these tx loopholes will allow us to lower

rates, allowing american business to become more competitive, and provide the spending cuts to put us on is sustainable path. >> you talked to virginia business leaders quite a bit. and what are you hearing from them? >> i think they realize that our corporate tax rates are too high compared with the rest of the world. nobody really pays the documented raid. documenthe company's can pay in the high teens as opposed to the 35% rate. we cannot tax our way or cut spending enough to really solve this problem entirely. we still to come -- we still have to have a plan to grow our economy. whether itt is life sciences, information technology, we all need to be growing innovation.

we have to makeurthat while we cut back, and the federal government has a role in this -- is three legs of the school. we have to cut spending, reforming our tax code, and we have to have a great plan in terms of our overall economy that will keep us competitive with to rest of the world. i think a lot of different business leaders in this community underand that better than most. >> talk to me abo the tax cucuts. we are seeing biotechnology and i.t. growing. where do you stand on targeted tax cuts? >> we need to make sure that we continue to impact capital formation. we still need to make sure that we have longer-term capital formation of around researcrch d development. we need to make sure that research and development continues -- we are not going to

compete on the basis of our lower wage rate. we have to be smarter. we have to be more around innovation and technology. >> across the board? >> marilyn, and virginia have benefited. we have to make stuff again in the area. and there are a lot of lessons we can learn from germany. they have come through e recessn by having advanced manufacturing that is frankly starting to top some of ours. >> talk to me about the things you felt like made you successful in the business world that you wish translated more on capitol hill. what are some of t things theyey can learn from the business world in terms of legislalation? >> when i go out to talk to groups, the first criteria you ought to look at when you are hiring somebody is at the budget side of things. ask them about their balance

sheet. at some point, what you bring in with what you spend has to balance. we have to have a sense and there is competition -- the competition is not between republicans and democrats. it is ourountry versus others around the world. if you only put aside your competition, you would never end up with a successful product. too many people spend al their time criticizing the other side rather than putting out a good product themselves. one of the reasons why i have always harped on the partisanship is because if i said i was only going to take ideas from past employees and nofrom the others, at the end of the day, people hire us, they get things done, and we ougughto

be measured by what we get done. >> we thank the senator for that. up next, proposed cuts to the budgetet would have a major impt on jobs and businesses in the washington region. ththat is nex with our all star ♪ [ male announcer ] not all steel is created equal. not all manufacturing processes are created equal. not all engineering standards are created equal. which is why not all luxury vehicles are created equal. the hard way means never taking short cuts. the hard way is how lexus inspires absolute confidence. this is the pursuit of perfection. see what it takes at lexus.com/thehardway. this is the pursuit of perfection. [music playing] america's beverage companies are working together

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>> and there werere two differet battles over the budget in capitol hill this week. kate andersen brower covers business news for bloomberg. ug fruehling, editor of the "washington business journal. and dr. peter morici from the

r.h. smith school of business at the university of maryland. welcome. tickets a little confusing, but basically you have the battle brewing over the so-called continuing resolution. they put that battle of last year and did not do it. there was the even bigger issue of the president's budget. let's first talk about federal jobs. we heard from speaker of the house john boehner this week and he refused to shed any tears for federal workers who snd to lose their jobs. here is what he had to say. >> i don't want anye to lose their job, wheer they're a fefederal l employee onot. but come on, we're brokeke. we've got to make tough dedecisionons, andnd the americn people s sent ththeir representative to washington n o make t toughecisns on theirir behalf.. we know w that we can't continue

to borrow 40 cents for every governmentfederal spends. >> not too sympathetic about federal workers. what is the need for the washington region? >> the federal government represen about a third of the washington region of economy. these things happen over time. that happened over years. it does not t happ quickly. the impacwill be felt over many years. we will pull through. the >> talk to us about republicans you have been covering. are they serious? >> senator mitch mcconnell has come out and said the president is not tackling it medicaid security which he says makes up the bulk of the deficit, the long-term deficit. of course, president obama says

they have made cuts in the areas that he cares a lot about. so it is going to ba tough fight ahead. >> peter morici, right now, the president is the only one that has a real budget on the table. republicans have not laid out their budget yet. >> that is absolutely disingenuous. the president's idea is to decrease spending over 1 years. deficithe president's reduction is increase taxes. if this esident i goioing to match the republicans dollar to dollar, he is really out of his league. >> the bipartisan coalition is not getting into specifics. you have some specific

proposals. >> the governor of virginia was harboring anyone to get into entitlements. there are things we can do right now. we could raise the retetirement age to 70 right now. unless we are willing to see people not have health care that need it, maybe folks that make less than $50,000 a year, we are going to have to pay less for health care. we are going to have to pay less for hospital administration. we are going to tighten up the system. >> i wilill let the senator warner's big for himself when it comes on the show. let's talk about something that is important for the washington business region. many democrats want to balance the budget. they are taking a hard look at tax breaks. there are plenty of them out there. jim moran was pretty blunt about what he thinks it i time to take away.

>> the subsidies that we give the oil and gas industry are obscene. the only way they will be able to continue is if the american people are not aware of them. i am convinced that is the case. i could mentionon in the mber of other subsidies. we paid $20 billilion to international firms not to grow in this country. it used to be to help of the family farmers. they did very little of the subsidy. ---- they get very little of the subsidy. the small oil and gas driller would be exempt from any legislation that we would apply to try to end those subsidies. the five major oil companies who alone make over $1 trillion over a delicate time who do not need ose subsidi, and the ceo of

shalt acknowledged we do not need these subsidies when oil and gas is over $50 a barrel. it is close to $90 a barrel right now. and lack of information on a part of the public, so we will continue to cut those programs that are applied against the least influential people in the legislative process, the poor, the lower middle class, the working class. those are the ones who take th brunt of this budget reduction. >> and other budget t items that has been a top priority for the grgreater washingtoton board of trade and businesses throughout the region, beefing up and betterin metro. republicans trip $150 million in funding intended to improve

safety and infrastructure for metro. jim moran says they're ready for more cutin this house. >> the continuing resolution just included the elimination of the $15million for washington's metro system. that is the house side. i do not think the senate is going to support that. the house is going to come forward for the next two years with some fairly radical ideas, much of it is becae many of the new members do not know enough to know what they do not know. they do not know how important it is to have public transit. many of them represent rural areas. they have never written on the metro. as longs the majority, it is going to be hard to make progress. i think we will be ae to stop

the biggest cuts over on the senate side. i am hoping the president does not signed legislation that would eliminate transit. >> you know how important metro iso the business community. what is taking place here o on capitol hill? >> we spent so many years trying to get this money all three jurisdictions had to approve their matching part of it. metro needs the money. we know that they need the money. the business community strongly supports both the federal and the state matches. >> what is your betting on whether or oil or gas gets eliminated? >> democrats are all for cutting or limb gas. -- oil and gas. they pay only capital gains tax on their incomes.

if you want to do something about oil and gas, he i going to have to do sometething about the tax breaks thahat he prodes to his traders on wall street for political campaigns. >> don't you think this is about voters who are looking at shell and exxon saying they do not need these tax subsidies? >> if he wants to get it, he is going to have to put something on the table for democrats as well. as a consequence, i don't think this is going very far. >> we are going to have more to talk about with r panel, coming up. stay with us on "washington business repor."

>> president obama took a trip on thursday to have dinner with a specialroup of business executives, people who took their bright ideas and turned them into tech titans. on the agenda, several priorities the president would like to advance. education, innovation, and green technology are ang them. we are joined once again by our roundtable. kate, what came out of this meeting? >> iis hard to overstate how

big of a push white house is making now on job creation. he met with executives from twitter and yahoo! who make the case that technology is really the way forward toet the economy back on track. one analyst i spoke with said that silicon valley is in a recovery. senator mark warner said if we do not pay attention to innovation, w, are in very bigig trouble. it is hard to overstate it. the president said he cpares google to the wright brothers and thomas edison. these are the areas where he seesome real opportunity to get this on a, rate down. >> what is at stake in the washington region for escambia the tech industry?

they are watching that very closely. we are all on board. >> peter? >> it is great to talk about helping development. what is the president going to do to get that iphone made in the united states as opposed to china? by the way, as a consequence, we are not going to get his manufacturing jobs thanat senatr warner talked about earlier in the show unleless we do somethig about china because they are requiring companies to do their research and development. >> i will have one of fun facts. the high-tech industry did

millions of dollars -- $1.5 million to president obama's mccain and one part $5 million for senator john mccain's campaign. our number of the week is 41. campaign. our number of the week is 41. we will tell you a

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>> it is time to explain this week's number of the week -- 41. they generatate a list by comparing the number of one-wait rentals of cities around the country. last year, d.c. did t make the list. that is all for this week.

thank you for joining us. we hope to see you next week on ♪ [ male announcer ] not all steel is created equal. not all manufacturing processes are created equal. not all engineering standards are created equal. which is why not all luxury vehicles are created equal. the hard way means never taking short cuts. the hard way is how lexus spires absolute confidence. this is the pursuit of perfection. see what it takes at lexus.com/thehardway. host: could switching to geico really save you 15% or more on car insurance?. host: does it take two to tango? ♪ ♪

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